The agricultural industry must pursue "reality-based transformation" to effect initiatives that do not compromise the sustainability of the industry, Empowerdex executive chairperson Vuyo Jack said during Agri SA’s Commodity and Corporate Chamber Conference, in Pretoria, on Thursday.
He called for a ‘sky view’ principle when pursuing transformation initiatives, saying that this meant having a perspective that allows for innovation but that was still grounded in reality.
Engaging with people on the ground level addresses what is happening there, while enabling companies to build impactful programmes, he stated.
Jack said transformation could be approached in three ways.
Firstly, there is the reformist approach, which is a more superficial approach. It appears that an organisation is transformed, but nothing has really changed and the substance remains the same.
He pointed out that this approach aimed to appease and placate everybody and maintain social cohesion, but nothing concrete is really achieved.
Secondly, there is a radical or revolutionary approach, which calls for radical economic transformation. While the objectives this aims to achieve are desirable, they are not practical and there is no concise plan to achieve them. Here, proponents break the rules as the system is unfair.
Jack said this approach was often pessimistic and alienating.
He was in favour of the third approach, namely the reality-based approach, with “head in the sky, feet on the ground and the head moving in the same direction as the feet”.
Proponents of this approach acknowledge that rules need questioning and changing, but also recognise that there are some rules that are working and should remain.
Jack commented that this was a mission-focused approach, entailing proper preparation and understanding that strived for an equal system for everybody.
While he acknowledged that this approach would take time to bear fruit, it was the most suitable long-term solution.
Jack also emphasised the importance of value creation when pursuing transformation initiatives, as this was necessary for economic growth.
Moreover, he indicated that value had to be captured equitably by all those involved in creating the value.
Further, the value had to then be transferred to the community and reinvested into the company – thereby allowing the individual, the company and the ecosystem to benefit.
This would engender a sustainable industry that could build reserves to cope with events such as droughts.
He believed most black economic empowerment initiatives had failed because they did not create equitable value.
Jack acknowledged that transformation initiatives were risky and he advised companies to strive for a robust risk profile at the minimum and an anti-risk profile at best.
Lastly, he noted that transformation initiatives had to provide a return on investment, as economic growth was built on this.
Implementing such initiatives came with costs and, therefore, had to drive returns to allow revenue growth, otherwise these initiatives would not be sustainable, he stressed.